Could A New Coupon App Bring Facebook One Step Closer To Retail Commerce?

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There have been some signals coming from Facebook that point to how it could one day become a platform for e-commerce beyond apps and virtual goods on Facebook itself. There are its patent holdings, and there is the code for a (not live) “Want” button to use on posts for particular products that could trigger a purchase. Today comes one more opening on this front, but from a third party rather than Facebook itself: couponing giant Valassis, which already works with some 15,000 advertisers to create electronic coupons, has launched a new Facebook app that lets brands offer coupons that can be printed or downloaded directly within Facebook itself, without taking users off the site — a first for Facebook, according to Valassis’ chief digital officer Jim Parkinson.

RedPlum Social Savings, as the app is called, is part of Valassis existing RedPlum service, which includes iOS and mobile web apps for redplum.com and save.com (and, soon, an iPad app) and already covers some 100 million users. What the new Facebook app is doing is making that couponing offer significantly more social: with the app integrated with Open Graph, users will be able to share their coupons with other users, and advertisers can create their own coupons via a white-label service which they can subsequently target to specific users — so, like a Sponsored Story, the coupons can run in a user’s Timeline and act as another form of marketing for a brand. The coupons will appear on Facebook’s mobile as well as desktop versions.

And while users are not able to redeem the coupons, you can see how this could be the logical next step — not just adding the coupon directly to a user’s loyalty card as you can already do, but pre-paying for them in the process. This is something that Parkinson says is being seriously considered by his company already.

The reason why Valassis said it wanted to keep users on Facebook for couponing is because the “basic philosophy” that Valassis has learned is that “once a person goes to a site or social network, transporting them away from it is considered rude.” So if they do create an e-commerce element to the couponing offer, it will be within Facebook itself. “Letting users do what they want, which is to stay on the social network, is pretty critical,” he notes.

Valassis has been running its social coupon app in beta up to now — one customer it notes is the U.S. grocery chain Food Lion, although there have been a number of other retailers and FMCG brands involved to date — and so far the indications are that users are responding positively, rather than viewing this like a piece of marketing spam. Valassis says that some 25,000 users have installed it, equating to a 72% adoption rate among those users it targeted. The app has subsequently led to some 450,000 impressions among those users and their networks.

Although this is a service developed by Valassis itself, Parkinson notes that his company has worked closely with Facebook in creating it. “They gave us lots of advice but fundamentally we did the development work on our own,” he says.

Does he worry that Facebook might look to move into this space itself, in its ongoing search for new revenue streams for its nearly one-billion user base? (A similar question exists for Apple with its new Passbook.)

“It’s hard to say what Facebook will or won’t do,” he says. “We haven’t really had that discussion with them.” Ultimately, for Valassis it comes to the table with a compelling offer: not only is it already available on different platforms but it already has 15,000 customers turning to it for coupon creation and distribution. “We have the content and the relationships already,” he notes. “As big as Facebook is, it might be hard for them to develop all those relationships itself.”

Next up is an iPad HD app that could likely spur the company to move faster on being able to prepay for the coupons directly on the app (the iPad has been well documented for being e-commerce friendly). On Android, Parkinson notes that his company will likely continue to develop on the web. “With the fragmentation on Android, it’s just too hard to get the full functionality working there,” he says.

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OverviewFacebook is an online social networking service that allows its users to connect with friends and family as well as make new connections. It provides its users with the ability to create a profile, update information, add images, send friend requests, and accept requests from other users. Its features include status update, photo tagging and sharing, and more.
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